Kenya Airways (KQ) net loss has nearly tripled to sh36.2 billion, the worst ever in the history of the airline, putting a blow on the airlines’ recovery path.
COVID-19 that disrupted travels around the world is hugely to blame for the sharp decline in passenger numbers.
The loss, for the financial year ended December 2020, is 2.8 times more than the Sh12.98 billion net loss it had posted a year earlier.
The latest loss means that KQ has now gone for the eighth straight year without profits, extending its accumulated losses to sh128.76 billion.
KQ chairman Michael Joseph says the outlook still looks bleak and the airline will be seeking a right-sized network to match the prevailing demand.
“The COVID-19 global outbreak in 2020 was beyond anyone’s prediction and its impact on the industry is expected to continue affecting air travel demand for the next two to three years,” said Mr. Joseph.
The loss is also the worst ever results in corporate Kenya.
The airline says that passenger revenue dropped by 67.5 percent to sh33.7 billion as passenger numbers reduced by 65.7 percent to 1.8 million.
However, the muted demand in passenger business and increased costs due to tighter health and safety measures kept recovery out of reach for the airline.
Michael Joseph asserted that approximately 70 percent of the total passengers carried in 2020 were flown during the first three months of the year, demonstrating the drop in demand as the global crisis deepened during the year.
Total income dipped by 58.9 percent to sh52.8 billion underlining the impact of a sharp fall in passenger numbers as countries restricted movement to contain the spread of COVID-19.
The airline last made a profit in 2012 when it closed with net earnings at sh1.66 billion.
Amidst the COVID-19 pandemic, the airline reacted to the hardships through layoffs and massive salary cuts to reduce the pressure on the bottom-line. Its CEO Allan Kilavuka who took over on April 1st 2020 slashed his salary by 80 percent.